As we fast approach mid-way through 2019, it’s interesting to look back on the past year and reflect on the impact of the Royal Commission into the Banking and Financial Services Industry.
I say that because, from where I sit, the impact has been seismic and the fallout significant.
Through observation the feeling of instability has been noticeable with a number of large corporates being undecided on their executive level corporate affairs and communications talent needs including functional structure and role scope.
Elsewhere, I note the same level of trepidation and caution.
I recently read the CEDA 2019 Economic and Political Overview (EPO) and was interested to see that CEDA too were predicting a year of “high uncertainty” on the economic, policy and politics front, both domestically and internationally.
And, in the recent Edelman Trust Barometer 2019, it’s interesting, but not surprising to see that less than 50% of Australians trust corporate enterprise, government or the media. That’s an astonishing figure, and reflective of the general mistrust of institutions which have underpinned our democracy for more than 200 years.
I certainly can’t remember a time in which there are so many unanswered questions about how the next 12 months will unfold. It is very unlike the market crash in 2008. We were clear of the issues and the resulting outcomes.
This has much to do with the Royal Commission but also, as we have noted in a previous column, the political instability and upheaval in the US, the protracted Brexit negotiations, and the increasingly fraught US-China and Australia-China relationships.
The fallout from the Royal Commission will have one upside; it will mean NAB and other financial institutions will reconsider how they lead by example, behave in a more sustainable manner and ensure alignment of their purpose and reputation to company objectives, as well as ensuring the incumbent corporate affairs functional leader is able to access the CEO and board to influence strategy.
It is a truism in business, alas, that we don’t see change in organisations until that change is forced on them through reputational crises.
And there have been few more dramatic reputational crises in the Australian financial sector than that brought about by Kenneth Hayne and his team.
On the surface, the current environment is concerning, however I am heartened to say that many of Australia’s leaders have learnt lessons by the mistakes of their industry colleagues, having been exposed by the impacts of the Royal Commission, and are voicing their commitment to their reputation management via focusing on improvements to their organisation’s culture, transparency and better stakeholder engagement activities.